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Legal aid team members exonerated in ESTO report

24 February 2012

The former members of the Law Society of Scotland's Criminal Legal Aid Negotiating Team who set up the company ESTO Law Ltd, did not mislead any other members of the Society, nor did they act in an actual or potential conflict of interest situation, an investigation into their conduct has found.

Controversy erupted last December following the announcement that five former members of the team had created ESTO Law to provide out-of-hours police station advice to detained suspects, when they had previously conducted negotiations on behalf of the profession with the Scottish Government and the Scottish Legal Aid Board on how the police station duty scheme would work. It was alleged that they had used information gained through their position as negotiators to obtain a commercial advantage.

The Society's Council instructed an investigation by its office bearers, President Cameron Ritchie and Vice President Austin Lafferty, who were assisted by non-solicitor Council member John Reid. Their report, published today, concludes that there is "absolutely no evidence" that the solicitors concerned withheld information from other members of the profession, or misled members, or conducted negotiations in any way other than in good faith on behalf of the profession and the public.

However the report recognises that "a perception of conflict of interest by members of the Society was inevitable" unless steps were taken by those concerned to negate such perception at an early stage, and such steps as were taken were inadequate. It recommends that the Society considers establishing a code of conduct for Council and committee members, to help address such situations in the future and better protect the reputations of the Society and of the individuals who volunteer as Council or committee members.

Timeline

The report finds that the "difficult" negotiations over the police station duty scheme - the need for which arose from the Supreme Court decision in the Cadder case in October 2010 - were concluded on 3 August 2011. One member of LANT, the negotiating team - Vincent McGovern - had already resigned by then. The idea that developed into ESTO Law followed an address by Lord Carloway at the Society's annual conference on 6 September, and the model took shape following discussions at the end of September.

John Scott resigned from LANT on 18 October, and Ian Bryce and Ken Dalling on 27 October. On 28 October the four, along with two other solicitors, agreed to form a new limited company; they acquired ESTO as a recently incorporated off-the-shelf company. The fifth LANT member to join, Stuart Munro, was invited to do so on 1 November but did not resign from LANT until 13 December, having previously been advised by Legal Aid Convener Oliver Adair that there was no conflict of interest in his remaining a member.

The new business was publicly launched on 12 December, but its service was withdrawn within days, following sustained criticism of those involved.

Evidence

The investigators looked into allegations that the five:

  • used their position and information made only available to them during the negotiations to further their business venture;
  • used such position and information, misleading other solicitors by withholding relevant information and inducing them not to support the duty scheme with the sole intention of establishing a competing business;
  • continued to act as members of LANT and negotiate on behalf of the profession where there was a significant conflict of interest or potential conflict of interest.

They found that the wider profession was equally aware of the "unmet legal need" that gave rise to the venture. In addition, on the evidence:

1. The members of LANT did not volunteer to negotiate on behalf of the profession with the intention of developing a business idea: most of them joined long before the legal changes that gave rise to the scheme.

2. They developed a business idea based on information that came to light during the negotiation process but which was information already in the public domain.

3. They made efforts to draw this information to the attention of the profession at faculty meetings and through regular and publicly available correspondence.

4. The potential for unmet need, and therefore the proposed service to be provided by ESTO, was arrived at after the Scottish Government and SLAB chose not to proceed with a scheme which was promoted by LANT. Before the decision was taken to establish ESTO, LANT also successfully negotiated a number of favourable changes to the duty scheme set up by SLAB, in particular the removal of subsumption of fees.

5. The proposed service was intended to alleviate genuine concerns which arose from within the profession about the challenges of servicing police station interview work and the risk of losing clients.

Hence, the investigators conclude, there is "no evidence" that any of the ESTO directors misused their position, or misled fellow members of the Society. Looking at the timeline of events, there was neither an actual nor a potential conflict of interest involving the directors who were involved in LANT.

However the review goes on to consider "how the Society deals with risk to the reputations of the Society, the Council, the individual Council members and committee members". It adds: "It would appear that there are some mechanisms in place for identifying risks but some doubt as to whether we adequately identify the magnitude of risk. There remains no consistent means of managing such risks. We recommend this is addressed urgently by the Council." It concludes with the recommendation for a code of conduct for Council and committee members.

Professionalism

Commenting on the publication of the report, Cameron Ritchie: “The launch of ESTO last December caused a number of members to raise concerns with the Society. Some individuals chose to make very serious and in some cases very public allegations. It was right that the Council of the Society took such issues seriously, which is why it commissioned a full review.

"Those of us tasked with carrying out this review have strived to ensure it is both thorough and fair. We have considered all the minutes of Legal Aid Negotiating Team meetings over the last year, all of the information that was provided to members throughout legal aid negotiations and a host of other information.

“To be clear, we have found no evidence – none whatsoever – to substantiate the suggestions that the solicitors involved in any way misused their positions on the criminal Legal Aid Negotiating Team, withheld information or misled their fellow solicitors.

“Indeed, from our analysis of the facts, we have been reminded of the immense professionalism and commitment with which the members of the LANT consistently showed and against an extremely challenging backdrop. We believe that throughout their time on the LANT, they conducted themselves with the highest integrity and with the single purpose of acting in the interests of their fellow legal aid practitioners.”

On the recommendation for a code of conduct Mr Ritchie commented: “One of the strengths of the Society is the sheer number of solicitors and non-solicitors who volunteer their time and experience to help us lead and support the profession. We value that input but we also need a clear and consistent framework to help resolve issues of conflict of interest when they arise. We believe a new code of conduct will help in this regard, but it is of course a matter for Council to consider and take forward.”

Welcoming the report's conclusions, ESTO director Ian Bryce said it entirely vindicated their position. He commented: "It is regrettable that the need for the review arose from concerns which were based on misconception and misinformation. A small number of vocal critics chose to ignore or misrepresent information provided to them, and we agree with the Society that some of the conduct which followed was 'deplorable'."

He added: "ESTO Law now intends to work with those solicitors who recognise the challenges faced by the profession and seek innovative solutions to them.”

John Scott QC, a former director, said: “This report confirms what we said at the outset – we did nothing wrong. ESTO Law was an attempt to help criminal law firms who were, and are, still struggling to adapt to the challenges of the Cadder case and 24 hour police station cover.... This has been a deeply unpleasant experience as a result of professional colleagues who have chosen to make allegations of impropriety which have proven to be unfounded. Despite their false claims our reputations remain intact.”

Click here to access the full report.

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